Florida AG Investigates Fidelity National, LPS Foreclosure Processes
The Florida Attorney General's office is investigating Fidelity National Financial (FNF), its former subsidiary Lender Processing Services (LPS) and LPS subsidiary Docx, alleging the companies used false documents to foreclose on Florida homeowners. But an LPS spokesperson characterized the accusations as inadvertent errors in its paper filing processes and said it will cooperate with any governmental agency that contacts the company. The company is also conducting its own investigation into the matter. The civil investigation revolves around allegations that FNF and LPS may have engaged in creating and manufacturing "bogus assignments" of mortgage ownership in order to perform foreclosures quicker, the Florida AG's office said on its website. The documents in question appear to be forged, incorrectly and illegally executed, false and misleading, the AG's office claims, adding the documents were used in court cases as "real" documents of assignment, used to expedite foreclosure proceedings in the state. According to Michelle Kersch, the LPS senior vice president of marketing and corporate communications, its Docx subsidiary provides document preparation services to its customers and/or their attorneys, a process that includes pre-approved template forms. After Docx processes the forms, the paperwork is transferred back to the client or its attorney. Docx does not file documents in court, Kersch added. The documents in question with the AG's office appear to be forms inadvertently recorded with missing information, Kersch said. Similar claims were investigated by the US attorney's office for the middle district of Florida earlier this year. In those instances, forms were filled with placeholder phrases like "Bogus Assignee" and "Bad Bene" when the attorney or customer requesting the document did not provide specific pieces of information to complete the form. The placeholders were used to flag the document to prevent further processing, but in some instances, documents slipped through the cracks and were inadvertently recorded. "LPS regrets these errors and the use of this particular placeholder phrasing," Kersch told HousingWire. LPS was the mortgage business segment of Fidelity National Information Services (FIS), which itself was a subsidiary of FNF. In 2006, FIS was spun off from FNF into a second publicly traded company. In 2008, LPS was spun off from FIS into its own publicly traded company. FNF, FIS and LPS are all headquartered in the same Jacksonville, Fla. office. Docx, a wholly owned subsidiary of LPS, performs lien release and assignment processing services. It was a privately held company before FNF acquired it in 2005. Now, it is a division of Fidelity National Default Solutions. According to FNF, Docx is the largest lien release and assignment processing firm in the US, with more than 100 employees, primarily based in Alpharetta, Ga. The Florida AG's office declined to comment on the case, including inquiries as to the timeline of when or if the investigation will lead to charges or lawsuits being filed against either of the companies. Representatives for FNF did not respond to HousingWire's requests for comment. Write to Austin Kilgore. The author held no relevant investments.